Periphery to outperform as Grexit overestimated

Funding activity is likely to resume next week, but in the meantime, Greek debt negotiations will take the main focus. RBS’s research team believes the market has overestimated the risk of a Greek euro exit, particularly given the pivotal role it plays in the US-European strategy to isolate Russia. The analysts are bullish on southern Europe which suggests peripheral long dated covered bonds should outperform.